The Sales Tax Lucky Draw Scheme (STLDS) 2011 of the Federal Board of Revenue (FBR) would encourage voluntary sales tax registration of restaurants, food outlets and hotels to promote documentation through issuance of invoices to the consumers. Sources told Business Recorder here on Tuesday that the STLDS-2011 would be notified through a statutory regulatory order (SRO).
The notification would issue 'Sales Tax Lucky Draw Rules-2011', drafted by 'FBR steering committee' on the scheme. According to the draft of the Sales Tax Lucky Draw Rules-2011, this is the first Consumer Incentive Scheme of its sort to be launched by FBR. The FBR endeavours to cover restaurants and similar food outlets, registered under Sales Tax Act 1990, through a lucky draw scheme to encourage voluntary registration of all those who are liable to pay/collect sales tax and to ensure that the tax deducted is also deposited into government treasury.
The scheme is envisaged to promote voluntary registration of restaurants and food outlets, promote documentation through issuance of invoices and to plug revenue leakages and is issued under powers vested in FBR under preamble to FBR Act 2007 and section 4(1) (1) of the said Act.
Under the STLDS-2011, the FBR will monitor the scheme's effectiveness through laid down parameters. The parameters include number of new registrations after launch of scheme; increased tax paid on returns by existing taxpayers; increased tax paid on returns by new taxpayers; number of audits conducted as a result of the scheme; tax levied in audit as a result of the scheme; invoices received during the scheme which were not verified due to outlet being below tax threshold.
According to the rules, the scheme aims at achieving the following objectives for the restaurants /food outlets sector: Promoting documentation; help in plugging of revenue leakages; increased voluntary sales tax registration; broaden tax base through invoice based information and create a data bank to deter tax evasion.
This scheme covers invoices issued by restaurants/food outlets all over Pakistan. The rules said that the customers availing food from restaurants/food outlets shall obtain invoices (receipts, cash memos) and inform FBR in the manner prescribed. The customers sending information of invoices along with their CNIC number under this Scheme shall be called participants in the scheme. The participants shall be subject to lucky draw through computer ballot to determine cash prizes.
The personal information of participants will not be used for tax purpose in their individual cases. However, the information received regarding sales by restaurants/food outlets shall be utilised by FBR for objectives of documentation. There will be upper and lower limits of the lucky draw prizes ie ranging from Rs 5000 to Rs 100,000. There would be around Rs 6 million prizes on monthly basis.
The FBR may increase, decrease or delete prize denomination or number of prizes. The details of the scheme show that a customer of a sales tax registered restaurant/food outlet in Pakistan can participate in this scheme. A participant shall participate in the STLDS through SMS texting his name. The CNIC invoice number, name of restaurants/food outlets and invoices total amount paid along with STRN/NTN.
The STLDS entries can be made during an entire month plus twenty four (24) hours after the close of the month. The invoices/receipts issued during a month shall be used for the draw conducted in respect of that month. The scheme will be launched from January 2011. The minimum number of invoice entries for holding of a ballot (lucky draw) exercise shall be 4900. Where total number of entries in a month does not meet minimum criterion of 4900, ballot will not be held, and the entries may be included in the next draw, and the prizes, too, may be carried forward, as per decision of the Steering Committee of the Scheme.
About the balloting process for entries, the rules say that the balloting will be held in a two-stage process. Under stage one, the entries not containing sales tax registration number of the restaurant/food outlet shall be ignored. The Data of the invoice pertaining to the registered service sector shall be cross-matched with FBR Master Registration Index.
In case the sales tax registration number (STRN) of the invoice exists in FBR data bases, but the name of address of the restaurant/food outlet does not match the taxpayer registration database of FBR, then the invoice entry shall be referred to the RTO for further investigation and reporting to FBR. It is important to mention that such cases are usually those where sales tax is charged by non-registered persons fraudulently.
In case RTO reports that a restaurant/food outlet does not exist at the given address, FBR will exclude the entry from the ballot. On completion of the process, the FBR will exclude entries where address and information provided is incomplete. The resultant information of invoices shall be called the 'pre-selected invoices'. The stage-2 entrants of the 'pre-selected invoices' shall be subjected to random ballot for selection of winners from names of the persons who have sent the relevant information.
The names and national identity card numbers and city of residence of successful participants as per Stage-2 will be displayed on FBR website www.fbr.gov.pk homepage and also be reported in the media. The rules say that the successful persons will also be informed by return SMS and they shall be required to contact FBR to receive prize money. The copy of CNIC and the original invoices will be necessary to receive prize money, which will be paid through a crossed cheque.
Where documents are not provided within one week of intimation, such prizes will automatically lapse. It will be responsibility of the winners of lucky draw to provide the CNIC (copy) and original invoice, in time. The documents can be provided in person or through couriered letter marked 'Lucky Draw Scheme' and addressed to Secretary (PR), FATE Wing, FBR, Islamabad. The decision of FBR in any modality of this scheme shall be final and shall not be challengeable. The income tax will be deducted from the prize money.
The rules further say that the draw for one month's entries will be performed on the 15th day of the following month, during the period of the scheme. The invoices of a single particular month shall be used in each succeeding ballot. The entries entered in one draw shall not be included in another draw. There will be no limit on the number of entries from a single person. Steering committee may devise/amend processes, forms, rules and regulations or set parameters for implementation of the scheme. The duration of the scheme will initially be six months, from January 2011 up to June 30, 2011 and can be extended if results would be positive, also subject to availability of funds.
The rules also highlight the utilisation of data from the STLDS-2011. The FBR-TP Audit Wing and FBR Enforcement Wing will devise mechanisms for utilisation of data gathered during the scheme.
This will include audit, enforcement and registration mechanisms, parameters, timeframe and design of result-reports, including data of invoices remaining unverified due to fact that outlets claim to be below taxable limit. The FBR will accordingly make a cost/benefit analysis of the scheme after 6 months ie after June 30, 2011, and decide on the continuation or otherwise of the scheme. The RTOs will have the invoice-data kept as confidential record. The restaurants/food outlets may display a banner, poster or display-stand as to be allowed by FATE Wing, the Sales Tax Lucky Draw Rules-2011 added.